What does a credit score measure?

A credit score is specifically designed to measure an individual's creditworthiness, which is essentially an evaluation of how likely they are to repay borrowed money based on their credit history. This score reflects a borrower’s credit behaviors, such as payment history, debt levels, types of credit used, and the length of credit history. Lenders use this score to determine the risk involved in lending money or extending credit to an individual. An accurate assessment of creditworthiness is crucial as it influences loan approvals, interest rates, and even rental agreements.

The other choices do not accurately capture the purpose of a credit score. Income stability pertains to a person's earnings over time but doesn’t reflect their borrowing behavior or payment history. The types of financial accounts held provide background on wealth or income but are not indicative of their reliability as a borrower. Investment knowledge does not relate to credit scores at all; it measures a person's awareness and skills in investing rather than their financial behaviors related to credit.